CPI likely to clock in at 20.3% YoY: Economists' Estimates

April 01, 2024 (MLN): The headline inflation for March 2024 is expected to slow down with an average estimate of 20.3% YoY compared to 23.1% YoY in February and 35.4% YoY in the same month last year, as per the projections put forth by various brokerage houses/economists.

This would bring 9MFY24 average inflation to around 27.2% YoY, mirroring the figures observed during same period last year.

On a monthly basis, the inflation is expected to move up with an average estimate of 1.4% MoM compared to 0.03% MoM in February, and below the 12-month average of 1.75% MoM.

The uptick in monthly inflation is primarily attributed to rises in the Food index (+1.3% MoM), Transport index (+1.5% MoM), and Housing index (+2.9% MoM), said Arif Habib Limited (AHL) in its "CPI preview" report.

Meanwhile, the housing index is anticipated to increase mainly due to an uptick in gas tariff and LPG prices.

Additionally, the transport index is expected to stay elevated due to a MoM increase in petroleum product prices.

Looking ahead, headline inflation is projected to decline mainly due to a significant base effect.

However, some of the risk factors that could affect these forecasts, include: fluctuations in food prices, potential depreciation of the local currency against the USD, ongoing rises in international oil prices, and fiscal/budgetary actions following entry into a new IMF program, AHL said.

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